Texas homeowners often want to keep their properties in the family, passing them on to the next generation. This requires estate planning and strategy. Read on to learn more about the first steps to developing a plan for your home when you’re no longer around to take care of it.
1. Involve everyone
A smooth transfer of real estate from one family member to another has to be a full-fledged discussion. You need to understand what the family would like to see happen to the property. Children might have different ideas about living, selling, renting or holding the home.
This is how conflict flares up. Without a structured strategy, you might find out too late that everyone’s plan is different. Not only should there be a conversation, but perhaps a neutral party such as your estate planning attorney should facilitate.
2. Prevent debts for heirs
Property inheritors who decide to give up the property could incur all sorts of financial liability. There can be legal fees, real estate taxes and other costs. If estate tax exemption falls below the federal level, inheritors might get hit with a hefty tax bill. This can lead to a variety of financial entanglements that you should plan for in order to avoid.
3. Know your mortgage terms
Even the savviest homeowner may not know about a “due on sale” clause in their mortgage. This is a term of the loan that says upon death, you have to pay off liquid assets in the estate. If so, the inheritor has to qualify for a mortgage to hold onto the property, or the bank can sell the home.
The transfer of real estate assets has a few landmines. It’s important to design and secure a plan that makes sense to everyone and protects the assets you want to pass on. An estate planning attorney may help guide you throughout the process.